Bac 401 Audit Practice And Investigation Question Paper

Exam Name: Bac 401 Audit Practice And Investigation 

Course: Bachelor Of Commerce

Category: Kenyatta University question papers

Exam Year:2011

KENYATTA UNIVERSITY
UNIVERSITY EXAMINATIONS 2011/2012
INSTITUTE OF OPEN LEARNING – (IOL)
EXAMINATION FOR THE DEGREE OF BACHELOR OF COMMERCE
BAC 401: AUDIT PRACTICE AND INVESTIGATIONS

DATE:
Saturday, 17th December 2011
TIME: 8.00 a.m. – 10.00 a.m.
INSTRUCTIONS:
1. Answer ALL Questions
2. Show All your workings
Q.1) (a)
Define the following terms


(i)
Audit risk






(2 marks)


(ii)
Inherent risk





(2 marks)


(iii)
Control risk





(2 marks)


(iv)
Detection risk





(2 marks)


(b)
What factors might indicate higher than normal audit risk?
(10 marks)

(c)
What is a risk based audit?




(2 marks)

(d)
What is the audit approach in areas of high risk?


(5 marks)









(Total 25 marks)
Q.2) (a)
Describe the auditors’ duties in respect of going concern basis.
(4 marks)


(b)
Explain the auditor duties in relation to the following reports accompanying


published financial statements.





(i)
Cash flow statement




(3 marks)
(ii)
Directors’ report





(3 marks)
(iii)
Comparative figures and statistics


(3 marks)
(c)
List and explain any four qualities the auditors look for in the final review of

financial statements.





(2 marks)








(Total 15 marks)
Q.3) What controls would you advice over income expenditure – the charity is run by a board

of 10 parents with a chairman, secretary and treasurer non of whom are paid. (15 marks)
Q.4) (a)
What are the directors’ responsibilities for stock taking?

(3 marks)

(b)
What are the auditor’s duties toward stock taking:


(i)
Before the stock take?




(4 marks)


(ii)
During stock take?





(4 marks)
(iv)
After the stock take?




(4 marks)
(Total 15 marks)
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